🪟Window Theory

The reversal or mean reversion can be one of the best trades out there. It can also kill you.

The OPEN (930-1030) is often the most volatile part of the trading session where we can see 2-3 strikes moves in either direction. The open is not necessary to trade. It's very difficult to gauge where price action will go. That's why we use The Window.

The Window is 10:30 - 11:00 directly after the open.

We love THE WINDOW anytime volume is over 100%. We love it even more if volume spikes from 100 to 110 or 120%.

Strategy depends on what happened during the open and where price is from the blue line during the window.

If we're on NIGHTMARE or HARD MODE, then consider the window closed unless K (komodo) gives us a lot of good alerts.

Basic strategy:

• If nightmare or hard mode, wait until 1300

• BL -1 and lower, prefer BEAR BOMBS that follow trend, do not trade BULLS.

• Price flat at BL, does not go up or down 2, then wait until after 1300

• BL +1 and higher, prefer BULL BOMBS that follow trend, do not trade BEARS

If price is 1-2 strikes below the blue:

THEN

1.) Expect we will go to 3-strikes regardless of volume or tradeability

2.) DO NOT TRADE BULLS until after 1300 (pref KTR, BL -3, PS -10)

3.) Any volume spikes (ex: 110% to 140%) normally indicate price will go beyond 3-strikes

On SPY 6/13/24 we have three KOMODO alerts where T (tradeability) is HARD MODE.

The BEAR BOMB is late and the BULL BOMBS are early.

Price bottoms out at 12:30 and if you used KTR both trades returned over 100% at max gain.

If price went down but does not return to the blue:

THEN

1.) It's possible that we will see a trend session down.

2.) If volume is over 100%, then expect 3-strikes in whatever direction it breaks

3.) Normally there will be failed attempts at the blue line before a nuke.

https://app.rigged.ai/flows/SPY?&day=2024-06-20

If price went down but returns to the blue:

THEN

1.) It's likely price will continue higher, look for BULLS for confirmation.

2.) DO NOT TRADE BEARS unless we are BL -1

3.) Possible trend session with price closing at a high.

THIS IS PROBABLY THE BEST SETUP.

RIGGED

If price is 1-2 strikes above the blue:

THEN

1.) It's likely price will continue higher, we may be late to the trade

2.) Look for BULL SWINGS or use KTR on BULL BOMBS

3.) Expect 3-Strikes or higher regardless of volume / tradeability

SPY 04/05/24 example:

SPY 06/17/24 example: